Working With a Home Builder
Working with a builder can seem to be one of those cut and dry deals but as with most in real estate such is not the case.  It is not impossible to go at it alone with a builder and get the best deal you can but I highly encourage you to build a team with a good Realtor by your side.  As you will see with this post there are many things to consider and having another set of eyes that deals with builders in their profession can only help ensure your best interest are taken care of and looked after.  Some builders can base bonuses on how much profit a sales person can get out of each home and Real Estate Professional will make sure to negotiate every upgrade possible and garner the best price.  While there are too many variables to cover them all in a blog post there a few things I wanted to cover for you to keep in mind when working with a builder.  Of course first comes picking the area and layout of the home and it is crucial as with any home purchase to keep future resale value in mind.  Even if you do not plan to sell you do not want to create a negative equity situation for yourself.  Ensure the area is of stable growth and not on a decline then of course be logical and reasonable when choosing the layout of the home.  Just because you may want and can possible afford the bigger home make sure it makes sense for your needs and is close to size and scope of other homes in the area.  Building a home whether smaller or bigger that is not in line with the homes in the subdivision has great potential to lower the overall value of your investment.   Be practical as well when deciding layout I mean if you dine out 6 nights a week and are rarely caught in your kitchen then why not opt for the smaller kitchen.  Think of what you truly need and meld that as best you can to what you want, it can save you large sums of money in the short and long term.  Be Eco-friendly as well.  These upgrades do need to be researched because some have the potential to pay for themselves several times over and would be unwise to exclude them from your home and some are fluff and do you little good if any.  On that note make sure functionality plays a major role in your decision making process.  While the carpet may look beautiful in the model home it will be a different story after just a few short years in a busy home with kids it is worn out and stained and the hardwood would have been just a bit more and would still be in good shape so it is important to incorporate things that will function for long periods of time with little to no maintenance.  Something to keep in mind as well is that it seems if you are one of the very first homes in a new subdivision you have the greatest chance for negotiating the lowest purchase price as they want to quickly get homes in the subdivision to show growth to attract other potential buyers and of course appease their bosses hungry for profits!  As the subdivision begins to fill seems to be the best time to get the most comps because they are much more firm on price at that point, wanting to ensure the home prices go in the right direction but will offer upgrades at no cost to keep the deal going.  Some builders also offer allowances but be wary because there are usually caveats and loopholes that they can back door you with and you end up paying more in the end.  Allowances are essentially discounts for you suppling something the builder otherwise would have like appliances or flooring etc...  There are cases where allowances can play in your favor especially if they do not have some type of building material or appliance you want incorporated and you have to go elsewhere to obtain it.  There are fees sometimes to use allowances and allot of builders also discount there allowances.  For instance they may charge you $10,000 for flooring and if you chose to provide your own they will only give you a $7,000 credit discounting for labor and profit margin.